Investment banker goes beyond financing

Rick Worner got his Kansas real estate broker's license specifically to draw development to Wyandotte County's Village West tourism district. He followed up by sending out about 400 promotional notebooks, even flying to Detroit to make a sales pitch for outdoor retailer Cabela's Inc.

It's not your usual fare for an investment banker.

But minus the efforts of Worner and his company, Fahnestock & Co. Inc., the 400-acre site next to the Kansas Speedway still might be undeveloped green space. Instead, it will have destination tenants such as Cabela's, Nebraska Furniture Mart, Warren Theatres LLC and a minor-league baseball park.

"Fahnestock did do some functions that normally you wouldn't think of an investment banker doing, and they did them very well," said Nebraska Furniture Mart's Tom Rossitto, who handled negotiations for the Omaha retailer's Village West store, which will open in September.

Fahnestock has crafted financing for some of the area's biggest development projects, including the Kansas Speedway, the Brush Creek improvement plan and Valencia Place on the Country Club Plaza.

The company's involvement with Village West appears to be paying off, and not just for developers. Cabela's, Nebraska Furniture Mart and Great Wolf Lodge have asked Fahnestock to assist them in scouting similar sites throughout the country.

"I think we will assume more of a proactive development-assistance role in comparable developments," said Executive Vice President Jack Holland, who leads Fahnestock's Kansas City office.

Village West was promoted publicly by Carol Marinovich, mayor of the Unified Government of Wyandotte County/Kansas City, Kan., and County Administrator Dennis Hays.

The Unified Government helped provide the highway improvements and more than $85 million in tax increment financing to attract development.

But sources familiar with the project said Worner is the deal-maker who continues to draw big-name tenants to Village West.

"It really is Rick. It isn't anybody else," said Herb Krumsick, senior vice president of Weigand-Omega Management Inc., a Wichita real estate broker involved in the Warren Theatres deal. "Anybody else is important, and they're all doing the job, but it's Rick doing the deals."

With 1 million square feet of retail space developed or under construction, Kansas officials think Village West will be among the state's top travel destinations. Its projected 7 million annual visitors would surpass the Country Club Plaza, which averages about 6 million.

Fahnestock's Kansas City office seeks public-private projects that are ambitious or financially complex.

Before Fahnestock acquired it in 1990, B.C. Christopher and Co. was a bond financier for public capital improvements to school districts, sewer systems and roads. As city and state governments became more involved in driving development in the 1990s, Fahnestock financed area projects that used TIF, which earmarks taxes generated by a development to offset public improvement costs. Holland said the redevelopment of the old Muehlebach Hotel was among the first such deals Fahnestock handled in Kansas City.

In 1998, Fahnestock helped International Speedway Corp. in Daytona Beach, Fla., select Wyandotte County as the site for the Kansas Speedway. Worner began talking to Unified Government officials about how to develop the 400 adjacent acres using state STAR bonds, which are repaid by sales taxes from a development.

At Worner's behest, Weigand-Omega in Wichita financed a retail study of Village West. The study showed that companies would favor locations in Johnson County rather than the intersection of Interstates 70 and 435 in Wyandotte County.

"They said it would take a magician, effectively, to put this thing together," Krumsick said.

Worner still wanted to try. Weigand-Omega agreed to license him as a Kansas real estate broker — something Worner thought would give him more credibility with potential tenants — and he started making calls.

Omaha-based Nebraska Furniture Mart, already interested in expanding to Kansas City, tentatively committed to the site in late 2000 — on one condition.

"They were very clear to me that I had to go get other destination development," Worner said.

Worner flew to Detroit in November 2000 to pitch the concept to Cabela's real estate manager Kevin Rhodes, who was visiting the company's new Dundee, Mich., store. Rhodes was intrigued by Worner's pitch, the TIF money involved and Nebraska Furniture Mart's interest in the deal. The next February, Worner and Unified Government officials drove to Cabela's headquarters in Sidney, Neb., and closed the deal within an hour and a half.

The company's 188,000-square-foot store opened Aug. 15 at Village West.

"Were it not for the economic incentives, we would not have developed there," Rhodes said.

Landing Cabela's and Nebraska Furniture Mart sparked later deals with Wichita-based Warren Theatres and a $51.5 million Great Wolf Lodge resort, both slated to open in 2003. Duluth-Superior Dukes Baseball Club President John Ehlert announced in September that he would move the team from Minnesota to a $12 million park at Village West.

Worner continues to seek destination tenants for Village West. He acknowledges that it is an unusual gig for an investment banker who cut his teeth underwriting government bonds. But Worner and others agree that the project is something special.

"It's going to be something that isn't in Kansas City right now," Rossitto said.